1. Tran Thi Thu Hang Deputy Director General Ministry of Trade, Vietnam FACTORS FACILITATING AND CHALLENGING NEGOTIATION OF ENVIROMENT ISSUES IN RTA/FTA/WTO VIETNAM S EXPERIENCE

2. OUTLINE 1. Environment issues in VN trade agreements 2. Vietnam Commitments on environment services in WTO 3. Challenging factors 4. Facilitating factors 5. Domestic coordination

3. Environment issues in Vietnam Trade agreements State of play: Vietnam committed to liberalize environment services in accordance with its GATS/WTO accession schedule Vietnam is member of ASEAN Free trade area (CEPT) and joining ASEAN in FTA, CEP negotiation with Japan, Australia, India, USA… but no discussion on environment chapter

4. Environment issues in VN Trade agreements (contd) Vietnam engaged in more than 70 bilateral trade agreements with its trading partners. But no provision on environment protection or cooperation, except the Bilateral Trade Agreement with the USA (BTA) referring to Article 20 of GATT. Vietnam is member of about 20 MEA where some trade related environment restriction provisions are applied.

5. Vietnam commitments on environment services in WTO Vietnam started WTO accession negotiation in 1995. The first offer was made in 2001 but no environment offer was presented. In 2004, Vietnam concluded WTO accession negotiation package with EU at the margin of ASEM summit in Hanoi. The package included environment services. This paves the way for Ministry of Environment to make offer on environment services to be included in VN GATS offer in 2005

6. Vietnam commitments in WTO on environment services (1) Sewage Services(CPC 9401) : no commitments made on cross border supply mode for market access and national treatment, except related consulting services. No restriction on consumption abroad and commercial presence. Apply 51 % cap on foreign ownership during 4 years after accession. Foreign companies are allowed to do business activities in Viet Nam in the form of build- operate-transfer (BOT) and build-transfer-operate (BTO).

7. Vietnam commitments in WTO on environment services (2) Refuse disposal services (CPC 9402): no commitments on cross border supply mode for market access, except related consulting services. No restriction on consumption abroad and commercial presence and NT. Apply foreign ownership Cap 51 % during 4 years after accession. For public welfare, foreign-invested enterprises are restricted from collecting refuse directly from households, permitted to provide services at the refuse specific collection points. Import of refuse is forbidden.

8. Vietnam commitments in WTO on environment services (3) Cleaning services of exhaust gases (CPC 94040) and noise abatement services (CPC 94050): no commitments on cross border supply mode and personal presence for market access and national treatment, except related consulting services. No restriction on consumption abroad and commercial presence. Apply foreign ownership Cap 51 % during 4 years after accession.

9. Vietnam commitments in WTO on environment services (4) Environmental impact assessment services (CPC 94090*) : no commitments on personal presence for market access and national treatment, except related consulting services. No restriction on consumption abroad and commercial presence. Apply foreign ownership Cap 51 % for commercial presence during 4 years after accession

10. Challenging Factors Mandate is not clearly defined Competence factor: Regulatory competence is not clearly allocated and dispatched among government agencies, especially environmental services regulations. Political factor: environment services is a public services provided at almost zero fee and dominated by state monopoly. Liberalisation of environment services implies strong resistances.

11. Challenging Factors Legislative factor: environmental and trade related legislation is not completed and advanced. Management factor: lack of common concepts about environment services and its classification Environment standards are not fully in place and updated Limited scope of environment services provided in developing countries.

12. Challenging factors Coordination factor: Lack of coordination mindset Limited understanding about subject matter and its scope by regulators/players Weak overseeing and controlling institutions among and within parties concerned Not institutionalize new means of communication among government agencies (e.g emails, fax)

13. Challenging factors Consultation factor: Limited public participation in agenda setting and policy making due to: lack of active interest groups, lack of knowledge/awareness about environment issues Weak role of business associations in trade- environment policies and debate No institutionalized mechanism to take on board views from stakeholders. No public debate and monitoring mechanism after consultations

14. Challenging factors Action factor: Limited awareness of businesses about environment issues and their responsibility Weak enforcement of laws, regulations Lack of dispute settlements Limited human resource in trade related environment regulation and negotiation

15. Facilitating factors Political will: Every year, the Government allocates 1 % GDP for environment protection (about 0.6 billion USD); about 200,000 -500,000 USD/year for trade related environment issues research Common framework for actions or strategy is set, e.g 5 year Government Action Plan. Social constituency Active public campaign, awareness raising by local authorities and environment departments

16. Facilitating factors Leading role of success business in applying ISO 14000 and creating environment friendly business Liberalize environment service ensures access to better and more affordable technologies for environment protection Environment friendly products = ease of exports Confidence building process through technical assistance from donors to provide arguments on the issues.

17. Domestic coordination Coordination is institutionalized in laws/government regulations: Commercial Law in 2005; Law on environment protection in 2005; Laws on government organisation in 2001; National Plan on controlling environment pollution till 2010 and strategies till 2020 Government Decree 2005 governing working mechanism of Ministries and government agencies

18. Domestic coordination Intergovernmental working group (Ministries of Trade, Environment, Planning and Investment and Finances) to jointly decide resources allocation for environment protection and balancing different priorities. Intergovernmental negotiation team on environment issues Coordinated actions among government agencies; central and local authorities are guided by 5 years/10 year action plans of the Government.

19. Thank you for your attention